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The management board of Deutsche Post AG has today decided on the measures to sustainably secure the further earnings growth in the PeP division.

To counteract the decline in profitability in the Post - eCommerce - Parcel (PeP) division, which became evident already in Q1 the management board decided on a range of measures to specifically safeguard a positive earnings development in 2019 and 2020. The measures mainly target the areas of pricing, operating and indirect cost and a further improvement in productivity in the German postal and parcel business.

The measures will only in parts help already in 2018, therefore the profit from operating activities (EBIT) prior to one-off cost is now expected to come in at around EUR 1.1 billion. This includes additional operating expenses for productivity improvements of around EUR 150m. In addition a restructuring charge of EUR 0.5 billion will be recognized in 2018 to implement measures.

With the upcoming reporting for the first half of 2018 (scheduled for August 7th 2018) the activities of the recently founded area of Corporate Incubations will be shown as part of the new line Corporate Functions together with Corporate Center/Other. The full-year result of Corporate Incubations is expected to be EUR -70 million.

Including the above described effects, the management board expects in 2018 the consolidated EBIT to reach around EUR 3.2 billion. The PeP division is likely to contribute at around EUR 0.6 billion to this figure including the expected restructuring costs while the DHL divisions are still expected to reach around EUR 3.0 billion. The Corporate Functions result is expected to be at EUR 0.42 billion, including the unchanged projection for Corporate Center/Other of a result of around EUR -0.35 billion.

The earnings forecast for 2020 is confirmed also due to the above mentioned measures: consolidated EBIT is expected to reach more than EUR 5.0 billion. The PeP division is expected to contribute around EUR 1.7 billion of this and the earnings contribution of the DHL divisions is forecasted to reach around EUR 3.7 billion. Corporate Functions is forecast to reach around EUR -0.35 billion.

The reported Group Free Cash Flow for the full year 2018 excluding the debt-financed renewal of the Express intercontinental aircraft fleet is hence expected to exceed a minimum of EUR 1.0bn.

Financial Indicators

Explanations on these financial indicators are available in the 2017 Deutsche Post DHL Group Annual Report (see page 36f.), which is published on the company's website at the link below: